The Baltic Exchange issued its data concerning the freight derivatives markets for both tankers and dry cargo vessel, informing of an increase in trade volumes for 2019, in comparison with the previous years which experienced swings.
Specifically, the tanker Forward Freight Agreement (FFA) volumes were increased by 38% on the previous year, reaching 473,113 lots.
Dry FFA volumes reached the 1,632,773 lots, up 11% on 2018. One lot is defined as a day’s hire of a vessel or 1000 metric tonnes of ocean transportation of cargo.
Moreover, 2019 also experienced the first FFA trades in the LNG market.
Baltic Exchange Chief Executive, Mark Jackson, commented the numbers, stating that
2019 was another solid year for the freight derivatives market. Underpinning these volumes are both volatility in the freight markets and trust in the Baltic Exchange’s settlement data.
He added that in the previous year, 2018, both the dry bulk and the tanker sector experienced huge changes due to issues from the Vale iron ore disaster, attacks on tanker shipping in the Middle East and IMO 2020 impacting sentiment.
Concluding, in early November, Reuters reported that the Baltic Exchange’s main sea freight index showed a decrease on ships transferring dry bulk commodities because of the lower demand for capesize vessels.